Question by Beckie: Need help on our 1st home loan application! (FHA) 10pts?
I am under so much stress right now, I just can’t think clearly.. I feel I could just break down and cry at any moment. Thats why I’m turning to y/a lol. I’m sitting here, filling out my fiance’ and my home loan application (we’re getting married next month).
These are probably very simply questions to answers.. I’m just so over-loaded right now, with paying off the car loan, getting this done, taking care of my sick mother, paying her medical bills, and the list goes on and on..
Anyways:
Under “Assets” it asks “cash deposit toward purchase held by:” than wants me to put an amount under “cash or market value” — Are they talking about our down payment, or something else? I’d call the loan officer, but the office is closed.. if I don’t get an answer here, I’ll just call in the morning.
My other question is.. do I have to list our car loan under “Liabilities” if we plan on paying it off before we buy our new home? There is only $ 1200 left to be paid off.. and that can be easily paid off in 1 paycheck.
Thanks for all the help guys.. I really need it right now!
Best answer:
Answer by Josh
The car will probably still be added into your debts to calculate your DTI. If you could quickly pay it off and show proof of this they may not use it in the DTI but it will still show up in your credit report for a little while.
The “cash deposit towards purchase held by”, is them wanting to know where the money is coming from. If you are paying it without getting a gift from a family member or taking out a loan just put that is you who is paying it.
What do you think? Answer below!
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For your first question: Yes, they are talking about your deposit. Basically, you need to show that you have enough cash or equivalent on hand to pay your deposit. My equivalent, I mean things like certificates of deposit, stock, bonds, etc. As far as I can tell, all they are looking for is making sure that you have enough money to close on your home without borrowing more than what the bank is giving you.
For your second question: Yes. List all liabilities because they show up on your credit report. In fact, when I applied for a loan, I even had to explain every credit query. Feel free to let the loan officer know that you plan on paying it off. S/he will be in a position to let you know if it will affect your application, and if so, they’ll likely handle it by processing most of your application and then asking for proof of paying off the loan before giving firm approval on the loan. No matter what, make sure the bank know that you currently have an auto loan…I’m pretty sure they don’t want to be surprised when they pull your credit.
Don’t flip out over the loan application, because it is simply, an application.
They will be using your credit report and other resources to verify everything that you put on the application anyway.
Under Assets…you list:
Retirement Funds
All Savings
All Checking
Bonds
Don’t worry about what part is going to be the down payment…that doesn’t mattter…this is just to verify how much money you have TOTAL.
Under liabilities, you list.
ALL debts…all of them. Credit cards, student loans, etc.
You don’t list utilities, insurance payments, things like that.
Now, as for the vehicle…you LIST the debt on the application, however, the general rule of thumb is that if the MONTHLY PAYMENT that appears on your credit report, has 10 or fewer months remaining, the bank will not use that debt against you.
However, I caution you not to start paying this and that off until you know how much money you need for closing. I have seen people start paying off debts, and then are not able to close because they cannot source an extra $ 500 or so to close.